Exhibit 10.3
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made, entered into and effective
as of September 1, 2004 (the "Effective Date"), between HQ Sustainable Maritime
Industries Inc., a Delaware corporation with its principal place of business
located at 00 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX, 00000 (the "Company"), and
Xxxx-Xxxxxx Xxxxxxxx, an individual residing at 000 Xxxxxxxxx, Xxxx Xx-Xxxxxxx,
Xx, Xxxxxx, X0X 0X0 (the "Executive").
WHEREAS, prior commencing to the Effective Date (the "Inception Date"), the
Executive has been employed by, and has been performing services for, the
Company; and
WHEREAS, the Company and the Executive wish to memorialize the terms and
conditions of the Executive's employment by the Company in the position of Chief
Financial Officer;
NOW, THEREFORE, in consideration of the covenants and promises contained
herein, the Company and the Executive agree as follows:
1. Employment Period. The Company offers to employ the Executive, and the
Executive agrees to be employed by Company, in accordance with the terms and
subject to the conditions of this Agreement, commencing on the Effective Date
and terminating on the fifth anniversary of the Effective Date (the "Scheduled
Termination Date"), unless terminated in accordance with the provisions of
paragraph 11 hereinbelow, in which case the provisions of paragraph 11 shall
control, provided however, that unless either party provides the other party
with written notice of his or its intention not to renew this Agreement at least
six (6) months prior to the Scheduled Termination Date, this Agreement shall
automatically renew for an additional five-year period commencing on the day
after the Scheduled Termination Date and terminating on the fifth anniversary of
the day after the Scheduled Termination Date. The Executive affirms that no
obligation exists between the Executive and any other entity which would prevent
or impede the Executive's immediate and full performance of every obligation of
this Agreement.
2. Position and Duties. During the term of the Executive's employment
hereunder, the Executive shall continue to serve in, and assume duties and
responsibilities consistent with, the position of Chief Financial Officer,
unless and until otherwise instructed by the Company. The Executive agrees to
devote substantially all of his working time, skill, energy and best business
efforts during the term of his employment with the Company, and the Executive
shall not engage in activities outside the scope of his employment with the
Company if such activities would detract from or interfere with his ability to
fulfill his responsibilities and duties under this Agreement or require
substantial amounts of his time or of his services. Notwithstanding anything to
the contrary contained herein, the Executive may hold officer and non-executive
director positions (or the equivalent position) in or at other entities that are
affiliated and not affiliated with the Company. The Company acknowledges that
the Executive currently holds, and acknowledges the Executive's right to
continue to hold, such positions in such entities and to continue to fulfill his
obligations in connection with holding such positions in such entities so long
as it does not interfere with his ability to perform his duties and
responsibilities hereunder.
3. No Conflicts. The Executive covenants and agrees that for so long as he
is employed by the Company, he shall inform the Company of each and every
business opportunity related to the business of the Company of which he becomes
aware, and that he will not, directly or indirectly, exploit any such
opportunity for his own account, nor will he render any services to any other
person or business, acquire any interest of any type in any other business or
engage in any activities that conflict with the Company's best interests or
which is in competition with the Company.
4. Hours of Work. The Executive's normal days and hours of work shall
coincide with the Company's regular business hours. The nature of the
Executive's employment with the Company requires flexibility in the days and
hours that the Executive must work, and may necessitate that the Executive work
on other or additional days and hours.
5. Location. The locus of the Executive's employment with the Company shall
be the Company's office located at 00 Xxxx Xxxxxx, Xxxxx 0000, Xxx-Xxxx, XX
00000.
6. Compensation.
a. Base Salary. During the term of this Agreement, the Company shall pay,
and the Executive agrees to accept, in consideration for the Executive's
services hereunder, pro rata bi-weekly payments of the annual salary of
US$100,000.00, less all applicable taxes and other appropriate deductions. The
Executive's base salary shall be increased annually, on January 1 of each
calendar year, in amount no less than ten percent (10%). In addition, the
Company's Board of Directors (the "Board") shall review the Executive's base
salary annually to determine whether it should be increased more than ten
percent (10%). The decision to increase the Executive's base more than ten
percent (10%) and the amount of any such increase shall be within the Board's
sole discretion.
b. Annual Bonus. During the term of this Agreement, the Executive shall be
entitled to an annual bonus in an amount no less than US$25,000.00 for each
calendar year (or pro-rata portion thereof in the case of a period of less than
twelve (12) months). The decision to pay any annual bonus to the Executive in
excess of US$25,000.00, and the amount of any annual bonus increment in excess
of US$25,000.00, shall be within the Board's sole discretion based on its review
of the operating performance of the Company during the preceding fiscal year.
Each annual bonus shall be paid by the Company to the Executive promptly after
the first meeting of the Board following the previous calendar year, but in no
case later than March 30th of each year.
7. Expenses. During the term of this Agreement, the Executive shall be
entitled to payment or reimbursement of any reasonable expenses paid or incurred
by him in connection with and related to the performance of his duties and
responsibilities hereunder for the Company, including attorney's fees and other
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costs related to the Company's Directors and Officers Liability Insurance
Policy(ies) not covered or reimbursed by such insurance policy(ies). All
requests by the Executive for payment of reimbursement of such expenses shall be
supported by appropriate invoices, vouchers, receipts or such other supporting
documentation in such form and containing such information as the Company may
from time to time require, evidencing that the Executive, in fact, incurred or
paid said expenses.
8. Vacation. During the term of this Agreement, the Executive shall be
entitled to accrue, on a pro rata basis, 25 vacation days, per year. The
Executive shall be entitled to carry over any accrued, unused vacation days from
year to year without limitation.
9. Stock Options. Subject to the adoption of a stock option plan (the
"Stock Option Plan") by the Board, the Company hereby agrees that the Executive
shall be eligible for non-qualified stock options on the terms and conditions
hereinafter stated:
x. Xxxxx of Options. On the later of the Effective Date or the date that
the Board adopts the Stock Option Plan (the "Grant Date"), the Company will
grant the Executive an option to purchase an aggregate of ten percent (10%) of
the then fully diluted shares of the Company's common voting stock that are made
available under the Stock Option Plan. In addition, at the beginning of each
calendar quarter occurring after the Grant Date but during the term of this
Agreement, the Company will grant the Executive an option to purchase an
aggregate of two and one half percent (2.5%) of the then fully diluted shares of
the Company's common voting stock that are made available under the Stock Option
Plan. Each grant shall be evidenced by an Option Agreement in a form
substantially identical to EXHIBIT A, attached hereto and made a part hereof.
b. Option Price. The per share exercise price of options granted pursuant
to this paragraph 9 shall be the fair market value per share of Company common
voting stock on the date such option is granted.
c. Vesting and Exercise. Fifty percent (50%) of the options granted on the
Grant Date shall be vested and exercisable from and after the Grant Date and the
remaining fifty percent (50%) of the options granted on the Grant Date shall
vest and become exercisable on the first anniversary of the Grant Date.
Subsequent grants of stock options shall vest and be exercisable pursuant to the
terms and conditions of the Stock Option Plan.
d. Accelerated Vesting. In the event the Executive is terminated without
Cause or terminates this agreement for Good Reason, all granted and unvested
options granted pursuant to this Agreement shall immediately vest and shall
become immediately exercisable by the Executive.
e. Payment. The full consideration for any shares purchased by the
Executive shall be paid in cash or on such other terms as the Executive and the
Company may agree.
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10. Other Benefits.
a. During the term of this Agreement, the Executive shall be eligible to
participate in incentive, savings, retirement (401(k)), and welfare benefit
plans, including, without limitation, health, medical, dental, vision, life
(including accidental death and dismemberment) and disability insurance plans
(collectively, "Benefit Plans"), in substantially the same manner and at
substantially the same levels as the Company makes such opportunities available
to the Company's managerial or salaried employees executive employees.
b. Notwithstanding anything contained in paragraph 10(a) hereinabove to the
contrary:
(i) The cost of the Executive's coverage under the Benefit Plans
providing health, medical, dental, vision, life (including accidental death and
dismemberment) and disability insurance, shall be paid by the Company.
(ii) The Executive's spouse and dependent minor children will be
covered under the Benefit Plans providing health, medical, dental, and vision
benefits, and the cost of such coverage shall be paid by the Company.
(iii) The Company shall reimburse the Executive for any out-of-pocket
expenses incurred in connection with the Benefit Plan coverages provided in this
paragraph 10 as the result of any deductible or co-insurance provision of any
insurance policy; provided however, that any such reimbursements shall not
exceed Ten Thousand Dollars (US$10,000.00) per calendar year.
(iv) The Company will purchase, at its expense, long-term disability
insurance providing the Executive with payments of US$10,000.00 per month until
age sixty-five (65), or the maximum authorized by legislation; provided however,
that if the cost of such long-term disability insurance coverage exceeds
US$12,000.00 per year, the Executive shall be required to pay any premium amount
in excess of US$12,000.00 per year and if the Executive chooses not to pay such
excess premium amount, the Company shall only be required to provide as much
long-term disability insurance as can be purchased for US$12,000.00 per year.
(v) The Company shall purchase a directors and officers liability
insurance policy or otherwise obtain directors and officers liability insurance
coverage, in the amount of Five Million Dollars (US$5,000,000.00) for the
Executive as soon as practicable but in no event later than the end of the
Company's first fiscal year following the Effective Date.
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11. Termination of Employment.
a. Death. In the event that, during the term of this Agreement, the
Executive dies, this Agreement and the Executive's employment with the Company
shall automatically terminate and the Company shall have no further obligations
or liability to the Executive or his heirs, administrators or executors with
respect to compensation and benefits accruing thereafter, except for the
obligation to pay the Executive's heirs, administrators or executors any earned
but unpaid base salary, unpaid pro rata annual bonus and unused vacation days
accrued through the date of death. The Company shall deduct, from all payments
made hereunder, all applicable taxes, including income tax, FICA and FUTA, and
other appropriate deductions.
b. Disability. In the event that, during the term of this Agreement, the
Executive shall be prevented from performing his duties and responsibilities
hereunder to the full extent required by the Company by reason of "Disability,"
as defined hereinbelow, this Agreement and the Executive's employment with the
Company shall automatically terminate and the Company shall have no further
obligations or liability to the Executive or his heirs, administrators or
executors with respect to compensation and benefits accruing thereafter, except
for the obligation to pay the Executive's heirs, administrators or executors any
earned but unpaid base salary, unpaid pro rata annual bonus and unused vacation
days accrued through the date of Disability. The Company shall deduct, from all
payments made hereunder, all applicable taxes, including income tax, FICA and
FUTA, and other appropriate deductions through the last date of the Executive's
employment with the Company. For purposes of this Agreement, "Disability" shall
mean a physical or mental disability that prevents the performance by the
Executive, with or without reasonable accommodation, of his duties and
responsibilities hereunder for a continuous period of not less than four
consecutive months, or not less than an aggregate of four months during any
one-year period.
c. "Cause."
(i) At any time during the term of this Agreement, the Company may
terminate this Agreement and the Executive's employment hereunder for "Cause."
For purposes of this Agreement, "Cause" shall mean: (a) the willful and
continued failure of the Executive to perform substantially his duties and
responsibilities for the Company (other than any such failure resulting from a
Disability) after a written demand for substantial performance is delivered to
the Executive by the Company, which specifically identifies the manner in which
the Company believes that the Executive has not substantially performed his
duties and responsibilities, which willful and continued failure is not cured by
the Executive within thirty (30) days of his receipt of said written demand; (b)
the conviction of, or plea of guilty or nolo contendre to, a felony, after the
exhaustion of all available appeals; or (c) the willful engaging by the
Executive in gross misconduct which is materially and demonstratively injurious
to the Company, after a written demand to cease or cure such gross misconduct is
delivered to the Executive by the Company, which specifically identifies the
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manner in which the Company believes that the Executive has committed gross
misconduct that is materially and demonstratively injurious to the Company,
which gross misconduct does not cease or is not cured by the Executive within
thirty (30) days of his receipt of said written demand.
(ii) Termination of the Executive for "Cause" pursuant to paragraphs
11(c)(i)(a) and (c) shall be made by delivery to the Executive of a copy of the
written demand referred to in paragraphs 11(c)(i)(a) and (c), or pursuant to
paragraphs 11(c)(i)(b) by a written notice, either of which shall specify the
basis of such termination and the particulars thereof and finding that in the
reasonable judgment of the Company, the conduct set forth in paragraph
11(c)(i)(a), 11(c)(i)(b) or 11(c)(i)(c), as applicable, has occurred and that
such occurrence warrants the Executive's termination.
(iii) Upon termination of this Agreement for "Cause," the Company
shall have no further obligations or liability to the Executive or his heirs,
administrators or executors with respect to compensation and benefits
thereafter, except for the obligation to pay the Executive any earned but unpaid
base salary, unpaid pro rata annual bonus and unused vacation days accrued
through the Executive's last day of employment with the Company. The Company
shall deduct, from all payments made hereunder, all applicable taxes, including
income tax, FICA and FUTA, and other appropriate deductions.
d. "Good Reason."
(i) At any time during the term of this Agreement, subject to the
conditions set forth in paragraph 11(d)(iii) hereinbelow, the Executive may
terminate this Agreement and the Executive's employment with the Company for
"Good Reason." For purposes of this Agreement, "Good Reason" shall mean the
occurrence, without the Executive's consent, of any of the following events: (a)
the assignment to the Executive of duties that are significantly different from,
and that result in a substantial diminution of, the duties that he assumed on
the Inception Date; (b) the assignment to the Executive of a title that is
different from and subordinate to the title specified in paragraph 2
hereinabove, or (c) a Change of Control (as defined in paragraph 11(d)(ii)
hereinbelow).
(ii) For purposes of this Agreement, "Change of Control" means the
Company's Board votes to approve: (a) any consolidation or merger of the Company
pursuant to which fifty percent (50%) or less of the outstanding voting
securities of the surviving or resulting company are not owned collectively by
the common share and warrant holders of Sino-Xxxx Canada (S.S.C.) Limited and
Red Coral Group Limited, Inc. as of September 1, 2004 (the "Current Control
Group"); (b) any sale, lease, exchange or other transfer (in one transaction or
a series of related transactions) of all, or substantially all, of the assets of
the Company other than any sale, lease, exchange or other transfer to any
company where the Company owns, directly or indirectly, 100 percent of the
outstanding voting securities of such company after any such transfer; (c) any
person or persons (as such term is used in Section 13(d) of the Exchange Act of
1934, as amended), other than the Current Control Group, shall acquire or become
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
whether directly, indirectly, beneficially or of record, of 50 percent or more
of outstanding voting securities of the Company; or (d) commencement by any
entity, person, or group (including any affiliate thereof, other than the
Company) of a tender offer or exchange offer where the offeree acquires more
than 50 percent of the then outstanding voting securities of the Company.
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(iii) The Executive shall not be entitled to terminate his employment
with the Company and this Agreement for "Good Reason" unless and until (a) he
shall have received written notice from the Company of the occurrence of an
event constituting "Good Reason" as that term is defined in paragraph 11(d)(i)
and (ii) hereinabove, which written notice the Company shall deliver to the
Executive within five (5) business days of the occurrence of any such event; (b)
he shall have delivered written notice to the Company of his intention to
terminate this Agreement or his employment with the Company for "Good Reason,"
which notice specifies in reasonable detail the circumstances claimed to provide
the basis for such termination for "Good Reason," within 30 days of his receipt
from the Company of the written notice described in paragraph 11(d)(iii)(a)
hereinabove, the Executive's having obtained actual knowledge of a "Good
Reason;" and (c) the Company shall not have eliminated the circumstances
constituting "Good Reason" within 30 days of its receipt from the Executive of
the written notice described in paragraph 11(d)(iii)(b) hereinabove.
(iv) In the event that the Executive terminates this Agreement and his
employment with the Company for "Good Reason," the Company shall pay or provide
to the Executive (or, following his death, to the Executive's heirs,
administrators or executors): (a) any earned but unpaid base salary, unpaid pro
rata annual bonus and unused vacation days accrued through the Executive's last
day of employment with the Company; (b) the Executive's full base salary
(including guaranteed annual ten percent (10%) increases) through the Scheduled
Termination Date; (c) the Executive's guaranteed annual bonuses in the amount of
US$25,000.00 that he would have been awarded through the Scheduled Termination
Date; (d) the value of vacation days that the Executive would have accrued
through the Scheduled Termination Date; (e) continued coverage, at the Company's
expense, under all Benefits Plans in which the Executive was a participant
immediately prior to his last date of employment with the Company, or, in the
event that any such Benefit Plans do not permit coverage of the Executive
following his last date of employment with the Company, under benefit plans that
provide no less coverage than such Benefit Plans, through the Scheduled
Termination Date ("Continued Benefits"); and (f) severance in an amount equal to
the sum of the Executive's annual base salary in effect immediately prior to his
last date of employment with the Company. The Company shall deduct, from all
payments made hereunder, all applicable taxes, including income tax, FICA and
FUTA, and other appropriate deductions.
(v) The Executive, at his option, shall be entitled to receive the
amounts described in paragraphs 11(d)(iv)(b) and (c) hereinabove in a lump sum
within forty-five (45) days of his last date of employment with the Company. To
exercise such option, the Executive shall deliver to the Company written notice
therefore within ten (10) business days after his last date of employment with
the Company. If the Executive fails to deliver such written notice within ten
(10) business days after his last date of employment with the Company, the
amounts described in paragraphs 11(d)(iv)(b) and (c) hereinabove shall be paid
to the Executive in the same manner as they would have been paid, in accordance
with the provisions of paragraphs 6(a) and (b), had the Executive remained
employed by the Company. The amount described in paragraph 11(d)(iv)(f) shall be
paid to the Executive within forty-five (45) days of the Executive's last date
of employment with the Company.
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(vi) The Executive shall have no duty to mitigate his damages, except
that Continued Benefits shall be canceled or reduced to the extent of any
comparable benefit coverage offered to the Executive during the period prior to
the Scheduled Termination Date by a subsequent employer or other person or
entity for which the Executive performs services, including but not limited to
consulting services.
e. Without "Good Reason" Or "Cause"
(i) By The Executive. At any time during the term of this Agreement,
the Executive shall be entitled to terminate this Agreement and the Executive's
employment with the Company without "Good Reason," as that term is defined in
paragraph 11(d)(i) and (ii) hereinabove, by providing prior written notice of at
least thirty (30) days to the Company. Upon termination by the Executive of this
Agreement and the Executive's employment with the Company without "Good Reason,"
the Company shall have no further obligations or liability to the Executive or
his heirs, administrators or executors with respect to compensation and benefits
thereafter, except for the obligation to pay the Executive any earned but unpaid
base salary, pro rata annual bonus and unused vacation days accrued through the
Executive's last day of employment with the Company. The Company shall deduct,
from all payments made hereunder, all applicable taxes, including income tax,
FICA and FUTA, and other appropriate deductions.
(ii) By The Company. At any time during the term of this Agreement,
the Company shall be entitled to terminate this Agreement and the Executive's
employment with the Company without "Cause," as that term is defined in
paragraph 11(c)(i) hereinabove, by providing prior written notice of at least
ninety (90) days to the Executive. Upon termination by the Company of this
Agreement and the Executive's employment with the Company without Cause, the
Company shall pay or provide to the Executive (or, following his death, to the
Executive's heirs, administrators or executors): (a) any earned but unpaid base
salary, unpaid pro rata annual bonus and unused vacation days accrued through
the Executive's last day of employment with the Company; (b) the Executive's
full base salary (including guaranteed annual ten percent (10%) increases)
through the Scheduled Termination Date; (c) the Executive's guaranteed annual
bonuses in the amount of US$25,000.00 that he would have been awarded through
the Scheduled Termination Date; (d) the value of vacation days that the
Executive would have accrued through the Scheduled Termination Date; (e)
continued coverage, at the Company's expense, under all Benefits Plans in which
the Executive was a participant immediately prior to his last date of employment
with the Company, or, in the event that any such Benefit Plans do not permit
coverage of the Executive following his last date of employment with the
Company, under benefit plans that provide no less coverage than such Benefit
Plans, through the Scheduled Termination Date ("Continued Benefits"); and (f)
severance in an amount equal to the sum of the Executive's annual base salary in
effect immediately prior to his last date of employment with the Company. The
Company shall deduct, from all payments made hereunder, all applicable taxes,
including income tax, FICA and FUTA, and other appropriate deductions.
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(iii) The Executive, at his option, shall be entitled to receive the
amounts described in paragraphs 11(e)(ii)(b) and (c) hereinabove in a lump sum
within forty-five (45) days of his last date of employment with the Company. To
exercise such option, the Executive shall deliver to the Company written notice
therefore within ten (10) business days after his last date of employment with
the Company. If the Executive fails to deliver such written notice within ten
(10) business days after his last date of employment with the Company, the
amounts described in paragraphs 11(e)(ii)(b) and (c) hereinabove shall be paid
to the Executive in the same manner as they would have been paid, in accordance
with the provisions of paragraphs 6(a) and (b), had the Executive remained
employed by the Company. The amount described in paragraph 11(e)(ii)(f) shall be
paid to the Executive within forty-five (45) days of the Executive's last date
of employment with the Company.
12. Confidential Information.
a. The Executive expressly acknowledges that, in the performance of his
duties and responsibilities with the Company, he has been exposed since the
Inception Date, and will be exposed, to the trade secrets, business and/or
financial secrets and confidential and proprietary information of the Company,
its affiliates and/or its clients or customers ("Confidential Information"). The
term "Confidential Information" means, without limitation, information or
material that has actual or potential commercial value to the Company, its
affiliates and/or its clients or customers and is not generally known to and is
not readily ascertainable by proper means to persons outside the Company, its
affiliates and/or its clients or customers.
b. Except as authorized in writing by the Board, during the performance of
the Executive's duties and responsibilities for the Company and (i) until such
time as any such Confidential Information becomes generally known to and readily
ascertainable by proper means to persons outside the Company, its affiliates
and/or its clients or customers, or (ii) for one year following the termination
of the Executive's employment by the Company for any reason, whichever is
earlier, the Executive agrees to keep strictly confidential and not use for his
personal benefit or the benefit to any other person or entity the Confidential
Information, whether or not prepared or developed by the Executive. Confidential
Information includes, without limitation, the following, whether or not
expressed in a document or medium, regardless of the form in which it is
communicated, and whether or not marked "trade secret" or "confidential" or any
similar legend: (i) lists of and/or information concerning customers, suppliers,
employees, consultants, and/or co-venturers of the Company, its affiliates or
its clients or customers; (ii) information submitted by customers, suppliers,
employees, consultants and/or co-venturers of the Company, its affiliates and/or
its clients or customers; (iii) information concerning the business of the
Company, its affiliates and/or its clients or customers, including, without
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limitation, cost information, profits, sales information, prices, accounting,
unpublished financial information, business plans or proposals, markets and
marketing methods, advertising and marketing strategies, administrative
procedures and manuals, the terms and conditions of the Company's contracts and
trademarks and patents under consideration, distribution channels, franchises,
investors, sponsors and advertisers; (iv) technical information concerning
products and services of the Company, its affiliates and/or its clients or
customers, including, without limitation, product data and specifications,
diagrams, flow charts, know how, processes, designs, formulae, inventions and
product development; (v) lists of and/or information concerning applicants,
candidates or other prospects for employment, independent contractor or
consultant positions at or with any actual or prospective customer or client of
Company and/or its affiliates, any and all confidential processes, inventions or
methods of conducting business of the Company, its affiliates and/or its clients
or customers; (vi) any and all versions of proprietary computer software
(including source and object code), hardware, firmware, code, discs, tapes, data
listings and documentation of the Company, its affiliates and/or its clients or
customers; (vii) any other information disclosed to the Executive by, or which
the Executive obtained under a duty of confidence from, the Company, its
affiliates and/or its clients or customers; (viii) all other information not
generally known to the public which, if misused or disclosed, could reasonably
be expected to adversely affect the business of the Company, its affiliates
and/or its clients or customers.
c. The Executive affirms that he does not possess and will not rely upon
the protected trade secrets or confidential or proprietary information of his
prior employer(s) in providing services to the Company.
d. In the event that the Executive's employment with the Company terminates
for any reason, the Executive shall deliver forthwith to the Company any and all
originals and copies of Confidential Information.
13. Ownership And Assignment of Inventions.
a. The Executive acknowledges that, in connection with his duties and
responsibilities relating to his employment with the Company, he and/or other
employees of the Company working with him, without him or under his supervision,
may create, conceive of, make, prepare, work on or contribute to the creation
of, or may be asked by the Company or its affiliates to create, conceive of,
make, prepare, work on or contribute to the creation of, without limitation,
lists, business diaries, business address books, documentation, ideas, concepts,
inventions, designs, works of authorship, computer programs, audio/visual works,
developments, proposals, works for hire or other materials ("Inventions"). To
the extent that any such Inventions relate to any actual or reasonably
anticipated business of the Company or any of its affiliates, or falls within,
is suggested by or results from any tasks assigned to the Executive for or on
behalf of the Company or any of its affiliates, the Executive expressly
acknowledges that all of his activities and efforts relating to any Inventions,
whether or not performed during his or the Company's regular business hours, are
within the scope of his employment with the Company and that the Company owns
all right, title and interest in and to all Inventions, including, to the extent
that they exist, all intellectual property rights thereto, including, without
limitation, copyrights, patents and trademarks in and to all Inventions. The
Executive also acknowledges and agrees that the Company owns and is entitled to
sole ownership of all rights and proceeds to all Inventions.
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b. The Executive expressly acknowledges and agrees to assign to the
Company, and hereby assigns to the Company, all of the Executive's right, title
and interest in and to all Inventions, including, to the extent they exist, all
intellectual property rights thereto, including, without limitation, copyrights,
patents and trademarks in and to all Inventions.
c. In connection with all Inventions, the Executive agrees to disclose any
Invention promptly to the Company and to no other person or entity. The
Executive further agrees to execute promptly, at the Company's request, specific
written assignments of the Executive's right, title and interest in any
Inventions, and do anything else reasonably necessary to enable the Company to
secure or obtain a copyright, patent, trademark or other form of protection in
or for any Invention in the United States or other countries.
d. The Executive acknowledges that all rights, waivers, releases and/or
assignments granted herein and made by the Executive are freely assignable by
the Company and are made for the benefit of the Company and its Affiliates,
subsidiaries, licensees, successors and assigns.
14. Non-Competition And Non-Solicitation.
a. The Executive agrees and acknowledges that the Confidential Information
that the Executive has already received and will receive are valuable to the
Company, its affiliates and/or its clients or customers, and that its protection
and maintenance constitutes a legitimate business interest of Company, its
affiliates and/or its clients or customers to be protected by the
non-competition restrictions set forth herein. The Executive agrees and
acknowledges that the non-competition restrictions set forth herein are
reasonable and necessary and do not impose undue hardship or burdens on the
Executive. The Executive also acknowledges that the products and services
developed or provided by the Company, its affiliates and/or its clients or
customers are or are intended to be sold, provided, licensed and/or distributed
to customers and clients in and throughout the United States ("the Geographic
Boundary"), and that the Geographic Boundary, scope of prohibited competition,
and time duration set forth in the non-competition restrictions set forth below
are reasonable and necessary to maintain the value of the Confidential
Information of, and to protect the goodwill and other legitimate business
interests of, the Company, its affiliates and/or its clients or customers.
b. The Executive hereby agrees and covenants that he shall not, directly or
indirectly, in any capacity whatsoever, including, without limitation, as an
employee, employer, consultant, principal, partner, shareholder, officer,
director or any other individual or representative capacity (other than a holder
of less than one percent (1%) of the outstanding voting shares of any publicly
held company), or whether on the Executive's own behalf or on behalf of any
other person or entity or otherwise howsoever, during the Executive's employment
with the Company and for a period of one year following after the termination of
this Agreement or of the Executive's employment with the Company for any reason,
in the Geographic Boundary:
11
(i) Engage, own, manage, operate, control, be employed by, consult
for, participate in, or be connected in any manner with the ownership,
management, operation or control of any business in competition with the
"Business of the Company." The "Business of the Company" is defined as providing
financing to students in the United States to defray the cost of higher
education (college, post-college graduate school and post-college professional
school) in the United States.
(ii) Recruit, hire, induce, contact, divert or solicit, or attempt to
recruit, hire, induce, contact, divert or solicit, any employee, consultant or
independent contractor of the Company to leave the employment thereof, whether
or not any such employee, consultant or independent contractor is party to an
employment agreement.
15. Dispute Resolution. The Executive and the Company agree that any
dispute or claim, whether based on contract, tort, discrimination, retaliation,
or otherwise, relating to, arising from, or connected in any manner with this
Agreement or with the Executive's employment with Company shall be resolved
exclusively through final and binding arbitration under the auspices of the
American Arbitration Association ("AAA"). The arbitration shall be held in the
Borough of Manhattan, New York, New York. The arbitration shall proceed in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association ("AAA") in effect at the time the claim or
dispute arose, unless other rules are agreed upon by the parties. The
arbitration shall be conducted by one arbitrator who is a member of the AAA,
unless the parties mutually agree otherwise. The arbitrators shall have
jurisdiction to determine any claim, including the arbitrability of any claim,
submitted to them. The arbitrators may grant any relief authorized by law for
any properly established claim. The interpretation and enforceability of this
paragraph of this Agreement shall be governed and construed in accordance with
the United States Federal Arbitration Act, 9. U.S.C. ss.1, et seq. More
specifically, the parties agree to submit to binding arbitration any claims for
unpaid wages or benefits, or for alleged discrimination, harassment, or
retaliation, arising under Title VII of the Civil Rights Act of 1964, the Equal
Pay Act, the National Labor Relations Act, the Age Discrimination in Employment
Act, the Americans With Disabilities Act, the Employee Retirement Income
Security Act, the Civil Rights Act of 1991, the Family and Medical Leave Act,
the Fair Labor Standards Act, Sections 1981 through 1988 of Title 42 of the
United States Code, COBRA, the New York State Human Rights Law, the New York
City Human Rights Law, and any other federal, state, or local law, regulation,
or ordinance, and any common law claims, claims for breach of contract, or
claims for declaratory relief. The Executive acknowledges that the purpose and
effect of this paragraph is solely to elect private arbitration in lieu of any
judicial proceeding he might otherwise have available to him in the event of an
employment-related dispute between him and the Company. Therefore, the Executive
hereby waives his right to have any such employment-related dispute heard by a
court or jury, as the case may be, and agrees that his exclusive procedure to
redress any employment-related claims will be arbitration.
12
16. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement or contemplated hereby shall be in
writing and shall be deemed to have been duly given when personally delivered,
delivered by a nationally recognized overnight delivery service or when mailed
United States Certified or registered mail, return receipt requested, postage
prepaid, and addressed as follows:
If to the Company:
HQ Sustainable Maritime Industries Inc
00 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Or
HQ Sustainable Maritime Industries Inc
0000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxx, (Xx), Xxxxxx
X0X 0X0
If to the Executive:
Xxxx-Xxxxxx Xxxxxxxx
000 Xxxxxxxxx
Xxxx Xx-Xxxxxxx, (Xx), Xxxxxx
X0X 0X0
17. Miscellaneous.
a. Telephones, stationery, postage, e-mail, the internet and other
resources made available to the Executive by the Company, are solely for the
furtherance of the Company's business.
b. All issues and disputes concerning, relating to or arising out of this
Agreement and from the Executive's employment by the Company, including, without
limitation, the construction and interpretation of this Agreement, shall be
governed by and construed in accordance with the internal laws of the State of
New York, without giving effect to that State's principles of conflicts of law.
c. The Executive and the Company agree that any provision of this Agreement
deemed unenforceable or invalid may be reformed to permit enforcement of the
objectionable provision to the fullest permissible extent. Any provision of this
Agreement deemed unenforceable after modification shall be deemed stricken from
this Agreement, with the remainder of the Agreement being given its full force
and effect.
d. The Company shall be entitled to equitable relief, including injunctive
relief and specific performance as against the Executive, for the Executive's
threatened or actual breach of paragraphs 12, 13 and 14 of this Agreement, as
money damages for a breach thereof would be incapable of precise estimation,
uncertain, and an insufficient remedy for an actual or threatened breach of
paragraphs 12, 13 and 14 of this Agreement. The Executive and the Company agree
that any pursuit of equitable relief in respect of paragraphs 12, 13 and 14 of
this Agreement shall have no effect whatsoever regarding the continued viability
and enforceability of paragraph 15 of this Agreement.
e. Any waiver or inaction by the Company for any breach of this Agreement
shall not be deemed a waiver of any subsequent breach of this Agreement.
f. The Executive and the Company independently have made all inquiries
regarding the qualifications and business affairs of the other which either
party deems necessary. The Executive affirms that he fully understands this
Agreement's meaning and legally binding effect. Each party has participated
fully and equally in the negotiation and drafting of this Agreement. Each party
assumes the risk of any misrepresentation or mistaken understanding or belief
relied upon by him or it in entering into this Agreement.
g. The Executive's obligations under this Agreement are personal in nature
and may not be assigned by the Executive to any other person or entity.
h. This instrument constitutes the entire Agreement between the parties
regarding its subject matter. When signed by all parties, this Agreement
supersedes and nullifies all prior or contemporaneous conversations,
negotiations, or agreements, oral and written, regarding the subject matter of
this Agreement. In any future construction of this Agreement, this Agreement
should be given its plain meaning. This Agreement may be amended only by a
writing signed by the Company and the Executive.
i. This Agreement may be executed in counterparts, a counterpart
transmitted via facsimile, and all executed counterparts, when taken together,
shall constitute sufficient proof of the parties' entry into this Agreement. The
parties agree to execute any further or future documents which may be necessary
to allow the full performance of this Agreement. This Agreement contains
headings for ease of reference. The headings have no independent meaning.
[remainder of page intentionally left blank]
THE EXECUTIVE STATES THAT HE HAS FREELY AND VOLUNTARILY ENTERED INTO
THIS AGREEMENT AND THAT HE HAS READ AND UNDERSTOOD EACH AND EVERY
PROVISION THEREOF. THIS AGREEMENT IS EFFECTIVE UPON THE EXECUTION
OF THIS AGREEMENT BY BOTH PARTIES.
UNDERSTOOD, AGREED, AND ACCEPTED:
Xxxx-Xxxxxx Xxxxxxxx HQ Sustainable Maritime Industries Inc
/s/ Xxxx-Xxxxxx Xxxxxxxx By: /s/ Xxxxxxx Sporns
------------------------ -----------------------------------
Name: Xxxxxxx Sporns
Title: Chief Executive Officer
and President
Date: November 12, 2004 Date: November 15, 2004
------------------- ---------------------------------
